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John Carmack says Sony and Microsoft "should auction their own console stock" to cut out scalpers

BusierDonkey

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Scalpers are not an issue. I’d argue the percentage of consoles bought by scalpers is minuscule.

The main issue is Sony, they need to get their shit together. They’re using scalpers as a scapegoat, the attacks should be directed at Sony, their stock is abysmal.

It may not be something Sony can even fix. Right now precious metals are both very high in price and exceedingly hard to obtain due to demand as everything uses them now. Environmental regulations makes extracting the raw materials costlier too. Even Microsoft with pockets as deep as any megacorporation on the planet can't produce units to meet demand. PC GPUs are constantly out of stock and even the Switch which uses about as much circuit and processor materials as a calculator can't keep supply up to the demand.

Blame the kung flu, blame politics, blame shitty manufacturing processes but Sony is just as much at the mercy of component availability as everyone else.
 

HoodWinked

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It's basically turning Sony into the scalper. In what way does this benefits the consumer?
well depends. this is already a far fetched scenario. but sony/ms could donate the extra money to charity or the extra money could be used to increase their priority in the chip fabrication line, thus increasing their supply. or just keep it as profits which means they're more solvent as a business thus they can invest more into development of games. vs enriching scalpers which does absolutely nothing.
 

martino

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Money is just the worst way to decide who can have one imo.
Why not lotteries to scrub some inequality in the decision ?
 

Forsythia

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I don't get why I cannot just preorder a Series X from MS themselves. First come first serve, 1 per account, no newly created accounts. But no, I just have to check the bloody store each day and be extremely lucky I guess.
 

Yselacrey00

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they still sell a fuckton of console at high prices because as you know, there is people who is ready to pay any price, so yeah sometimes they have to sell console close to the public prices, but i'm pretty sure they are already making money from all the previous console.

Also, it's not like they have to lose years or month or even weeks of their life to use bots that buy console for them, i don't know how does it actually work but is hardly a money\time consuming "job".

Again, not an expert so you may be right, i don't have a dog in this race, i don't

well depends. this is already a far fetched scenario. but sony/ms could donate the extra money to charity or the extra money could be used to increase their priority in the chip fabrication line, thus increasing their supply. or just keep it as profits which means they're more solvent as a business thus they can invest more into development of games. vs enriching scalpers which does absolutely nothing.
My question was in what way would this benefit the consumers?
 

Fox Mulder

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I doubt it. Demand is insane right now with the pandemic. You can’t find the new consoles and the old ones vanished last year. The switch still flies out of stock pretty fast. PC GPUs are hard to find.

This would be a mess even if scalpers got zero consoles. People having to bid $1000 directly to Sony instead of scalpers would be a bigger story.
 
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REDRZA MWS

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Jan 7, 2018
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Dumbest shit I’ve ever heard. Sony and MS aren’t fucking scalping anything. They sell the hardware at an MSRP. So they announce the consoles will be 499, then to stop scalpers, scalp them themselves? Idiocy.

Getting consoles at launch without pre orders has always been impossible. It’s just now that with a global pandemic, online is really the only way to purchase one. That leads to bots and asshats gobbling them up then making scalping much worse.

What they could and should do is sell them directly off PSN and Xbox stores, 1 per customer/address/credit card.
 

Paulxo87

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They need to be sold in fucking stores. The pandemic is no excuse anymore the shit is winding the fuck down. The malls, etc are all packed
 

REDRZA MWS

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Most modern governments have given their citizens electronic id cards.

Let manufacturers use government portals to tie a purchase to a single individual.
Absolutely not. Less government the better. Governments are already way too fucking involved in our lives. Stick to taxing the shit out of us and pissing away it all on corruption, mismanagement, and bullshit programs.

All governments should tighten the fuck up instead of getting involved with game consoles.
 
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REDRZA MWS

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Scalpers are not an issue. I’d argue the percentage of consoles bought by scalpers is minuscule.

The main issue is Sony, they need to get their shit together. They’re using scalpers as a scapegoat, the attacks should be directed at Sony, their stock is abysmal.
I agree with this too, and it’s not just Sony, it’s MS, AMD, and Nvidia. Pretty sure they are having issues manufacturing chips at the moment.
 
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ShadowWolf712

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Does sony or M really give a fuck if their console get sold to scalpers or gamers?!
Yes, actually.

They're selling these at a loss and hoping to make up the difference via software and subscription sales. If they're just sitting in a storage unit waiting for someone desperate enough to pay double to come along, that's one more unit they're not making that return on.

The biggest issue here is that they really can't just cut out retailers. They have partnerships with them, stock orders to meet, etc. If they sold all their stock direct with that "one per person" rule in place and the queues, that'd be great, but it'd also get them in trouble with said retailers. They're kinda stuck atm.
 
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Kerlurk

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Who cares about retailers.

If MS did this, all those retailers should stop stocking Xbox accessories and games.

Why does Carmark care so much about MS, and nothing said about Sony.
 
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dave_d

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Wrong, it's demand. But lets say supply is what determines price. Why would the price go up if Sony decided to auction PS5s directly? The supply hasn't changed. The only thing that's changed is who is the seller.
It's pretty much econ 101. (Supply curves and demand curves) The amount of a product people will want is dependent on price. (Lower the price and more people will be willing to buy, raise the price and fewer people are willing to buy.) The problem is that the price they set was too low for the demand so more people were willing to buy at that price than there was supply, creating a shortage. The 2 solutions are either make more units so demand matches price or increase the price so price matches demand. In effect this mechanism would allow Sony to adjust the price to match the real price the market is willing to pay and then lower it gradually over time.(IE Pretty much econ 101.)
 
Nov 10, 2020
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Bots will just eat up all of the auction stock and relist them on eBay or a site like StockX.

This would fix nothing.

Anything short of a soft credit check is not going to fix the broken release system for hot items (consoles, sneakers, clothing etc). And even a soft credit check would eventually be manipulated by bad actors.
 

Kamina

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Or online stores get their shit together and implement safety measures against bots as well as limit items per address.
 

AmuroChan

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Bots will just eat up all of the auction stock and relist them on eBay or a site like StockX.

If it's an auction, all the bots would have to bid against each other. So by all means if the scalpers want to drive up the price against each other and end up buying a console for $1500 a pop, have at it. Good luck trying to sell that on the secondary market for a decent profit.
 

Griffon

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Carmack is a genius, but he's a complete moron on this.
The prices would be outlandishly high and the honest consumers would get fucked both way both by the manufacturers and scalpers way harder.
 

Rentahamster

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or ykno...people should just refuse to buy from scalpers?

buy from a trusted retailer or wait. i mean it's not like there are many must have games right now to play on either console. demons souls is about the only one worth buying and even that is a 11 year old game.

if kids today could just be patient then this whole situation wouldn't be happening. but oh no gotta have a ps5/xsx right now
That's not how emergent group behavior works in a free market economy, and it's not only "impatient kids" driving this.
 

raduque

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I didn't read the thread but, what is to stop the scalpers from winning the auctions and then reselling for even higher prices?
 

Rentahamster

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Carmack is a genius, but he's a complete moron on this.
The prices would be outlandishly high and the honest consumers would get fucked both way both by the manufacturers and scalpers way harder.
There is an upper limit to what people are willing to pay for these toys. The attraction for scalpers is that they can profit at crazy high rates approaching 100% if not more which is why demand skyrockets. If there is a bidding process in place that raises the price, the profit margin for scalpers goes down -> the demand among scalpers goes down -> the equilibrium market price doesn't change that much, but the difference is the scalpers are cut out of the equation, the consoles are going directly to consumers, and MS/Sony/Nintendo keep more of the money.
 
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AmuroChan

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I didn't read the thread but, what is to stop the scalpers from winning the auctions and then reselling for even higher prices?

It forces scalpers to bid against other scalpers. The general consumer base has a threshold to how much they're willing to pay for a PS5. The higher the price goes, the smaller that pool of potential buyers gets. Right now the PS5 Disc edition is going for around $800ish on Ebay. If Sony is auctioning the PS5s themselves, that means some consumers are willing to pay $800 for the console. That in turn means the scalpers also have to pay at least that much to get one. So what profit margin is left for the scalpers?
 

raduque

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It forces scalpers to bid against other scalpers. The general consumer base has a threshold to how much they're willing to pay for a PS5. The higher the price goes, the smaller that pool of potential buyers gets. Right now the PS5 Disc edition is going for around $800ish on Ebay. If Sony is auctioning the PS5s themselves, that means some consumers are willing to pay $800 for the console. That in turn means the scalpers also have to pay at least that much to get one. So what profit margin is left for the scalpers?
Well, if the scalpers buy them at $800 from the manufacturer, they'll just re-sell them at $1000, and since there's no where else to get them, EUs will pay $1000.
 

AmuroChan

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Well, if the scalpers buy them at $800 from the manufacturer, they'll just re-sell them at $1000, and since there's no where else to get them, EUs will pay $1000.

They can't, because the number of stock is the same whether Sony sells them directly or they go through retailers. Right now, based on supply and demand the going rate is about $800. No one is buying it for $1000 unless either the rate of demand increases or the supply decreases. In an auction, there's no first come first serve. So bots are rendered useless. Therefore the consumer has just as much of a chance to win the auction as long as they're highest bidder.
 

HoodWinked

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My question was in what way would this benefit the consumers?

i guess i can simply what i'm saying. more money = more supply(higher manufacturing queue) more supply means auctions will naturally get cheaper and cheaper or money goes to charity or money goes to better games. all of these are beneficial to the consumer either directly or indirectly.
 

gunslikewhoa

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Microsoft won’t allow it either?

I have no idea. I didn't even know you couldn't just walk into a store and buy an Xbox. That's how little attention I pay to Xbox, I guess. hehe
 
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Yselacrey00

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i guess i can simply what i'm saying. more money = more supply(higher manufacturing queue) more supply means auctions will naturally get cheaper and cheaper or money goes to charity or money goes to better games. all of these are beneficial to the consumer either directly or indirectly.
Lol what? More money doesn't equal more supply. Do you think there's short supply because of money? There's short supply because of logistics that can't be fixed with money.
 

Yselacrey00

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Nov 20, 2018
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Well, if the scalpers buy them at $800 from the manufacturer, they'll just re-sell them at $1000, and since there's no where else to get them, EUs will pay $1000.
That's not how it would work though. The logic would be that there wouldn't be a way for scalpers to sell it for more because people would offer the maximum amount they are willing to spend. Why would a scalper win the auction with 800 if other people is willing to pay more? Surely the person that's willing to spend more is the one that's gonna win the auction, and it wouldn't be able to resell it because no one else would be willing to pay what the scalper paid.
 

ReBurn

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stop forcing online sales

make it in-store / curbside pickup only

one per customer

done
And then people go home, put it on eBay, make a couple hundred bucks and wait to buy one for themselves later. Just like how it is happening right now.
 

HoodWinked

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Lol what? More money doesn't equal more supply. Do you think there's short supply because of money? There's short supply because of logistics that can't be fixed with money.
You're thinking too generally.

TSMC will fabricate X number of chips. if Sony sells their consoles at a higher amount this allows them to spend more money on sourcing parts or to jump the queue for fabrication this means they can spend more to alleviate manufacturing bottlenecks. Sony likely only has Y amount of dollars to spend per console before the losses per consoles are not financially sustainable, now if they are now given 2*Y per console this means they can spend more money sourcing parts, increasing the speed of shipping, or faster/better logistics.
 

ReBurn

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You're thinking too generally.

TSMC will fabricate X number of chips. if Sony sells their consoles at a higher amount this allows them to spend more money on sourcing parts or to jump the queue for fabrication this means they can spend more to alleviate manufacturing bottlenecks. Sony likely only has Y amount of dollars to spend per console before the losses per consoles are not financially sustainable, now if they are now given 2*Y per console this means they can spend more money sourcing parts, increasing the speed of shipping, or faster/better logistics.
Spending more to alleviate bottlenecks isn't really a thing during the covid economy. It's not actually possible for a supplier to make more of some parts with their reduced capacity from not being able to have enough humans working.

Even if they could spend more to "jump the queue" it's not always possible depending on the contracts the supplier has with each company they produce for. They may not want to risk losing customers such as Apple to give Sony preferential treatment. I have to imagine that Apple's contract is probably more lucrative than Sony's. Apple will probably sell more devices (phones, tablets, Apple Silicon computers) with TSMC produced chips in one year than Sony will sell PS5's with TSMC chips in 5 years.
 
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UltimaKilo

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I don’t know why Sony or MS would care, so long as the product is getting moved. Moreover, by now those that really want the consoles can get one with a little work.
 

HoodWinked

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Spending more to alleviate bottlenecks isn't really a thing during the covid economy. It's not actually possible for a supplier to make more of some parts with their reduced capacity from not being able to have enough humans working.

Even if they could spend more to "jump the queue" it's not always possible depending on the contracts the supplier has with each company they produce for. They may not want to risk losing customers such as Apple to give Sony preferential treatment. I have to imagine that Apple's contract is probably more lucrative than Sony's. Apple will probably sell more devices (phones, tablets, Apple Silicon computers) with TSMC produced chips in one year than Sony will sell PS5's with TSMC chips in 5 years.
we already are playing hypotheticals upon a ridiculous scenario, I'm speaking in terms of all things equal, you're building an argument based on assumptions based upon more assumptions.
 

ReBurn

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we already are playing hypotheticals upon a ridiculous scenario, I'm speaking in terms of all things equal, you're building an argument based on assumptions based upon more assumptions.
Being able to "jump the queue" by paying more money made from scalping their own hardware is an assumption. You started with the assumptions, not me.
 

gunslikewhoa

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And then people go home, put it on eBay, make a couple hundred bucks and wait to buy one for themselves later. Just like how it is happening right now.

You don't seem to understand the current issue with scalpers at all. That's nothing like what is happening right now. Scalpers are using bots to purchase tens of units in minutes...tens of units per scalper.

If you limit their purchase to a single unit for pickup at a local store, it isn't even profitable for them to renf a bot any longer. They'll move on to scalping some other product.
 
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gunslikewhoa

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I don’t know why Sony or MS would care, so long as the product is getting moved. Moreover, by now those that really want the consoles can get one with a little work.

sales of games, subs, accessories is why they would care

also the possibility of a potential customer switching to their competitor's console simply because they are able to purchase one
 

UltimaKilo

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sales of games, subs, accessories is why they would care

also the possibility of a potential customer switching to their competitor's console simply because they are able to purchase one
That doesn’t make sense, which is why they don’t care. Whomever the scalper sells the product to, will still look for software and accessories, otherwise the hardware might as well be a paperweight for the consumer.

To your second point, if there was competition, MAYBE. However, at the moment, the PlayStation is the only platform where a consumer can play Sony software, same goes for Microsoft and the Xbox.